Mumbai: The BSE benchmark Sensex on Thursday plunged by over 526 points, its biggest fall in nearly two years, to end at 18,719.29 due to massive selling on worries that capital inflows may dry up if US Fed's sticks to its plan of slowing down monetary stimulus later this year.

The stock markets were also under heavy pressure after rupee touched life-time low of 59.93 against the dollar. Sensex tumbled 526.41 points, or 2.74 percent, to 18,719.29, recording biggest single day fall since September 2011. Across market, over 1,650 stocks fell and just 650 rose. Investor wealth worth Rs 1.5 lakh crore was eroded on Thursday.

US Fed Chairman Ben Bernanke last night ended weeks of speculation saying that the Federal Reserve will likely slow its bond-buying programme later this year and end it next year because the US economy is showing Strong sign of recovery. A pullback in Fed's USD 85 billion-a-month programme is being interpreted as a move that will hit inflows to emerging markets like India, said traders.

The plunge in domestic markets was led by stocks of realty, metal, banks and power shares with 28 scrips of 30-share Sensex ending down. Only, Wipro and Sun Pharma rose. Heavyweight stocks like Reliance Industries dropped 3.84 percent and Infosys lost 2.92 percent. Jindal Steel and Power sank 9.62 percent on major sell-off by participants.

The broad-based National Stock Exchange index Nifty dipped below 5,700 level by losing 166.35, or 2.86 percent to close at 5,655.90. Also, SX40, the flagship index of MCX-SX, closed 308.22 points, or 2.70 percent, down at 11,118.85.